Arkansas Life Study Guide

Arkansas’s life provisions sit close to the NAIC baseline — and that is exactly what makes them dangerous. When a state agrees with the national material on four numbers and then quietly disagrees on the fifth, the fifth is what gets tested. Learn the standard set, then learn the three places Arkansas writes its own rule: the reinstatement interest cap, the life-settlement rescission window, and a free-look ladder that stays low until a replacement walks in the door.

The standard provisions — the baseline you already know

An Arkansas individual life policy is incontestable after 2 years from date of issue (§ 23-81-105). The grace period is 30 days, and — worth underlining — it is not varied by premium mode for ordinary life (§ 23-81-104(a)). The suicide exclusion runs 2 years from issue (§ 23-81-115(a)(2)(E)). And the required nonforfeiture options are the classic three: cash surrender value, reduced paid-up insurance, and extended term insurance.

Reinstatement is where Arkansas starts adding detail. The window is 3 years from default (§ 23-81-111) — standard enough. But the statute also caps what the insurer may charge on the arrears: interest not exceeding 6% per year, compounded annually.

Free look — ten, unless somebody is being replaced

Arkansas is stingy where many states are generous. A new individual life policy gets 10 days, the statutory minimum (§ 23-79-112(f)). An ordinary annuity gets 10 days as well — and note the carve-out, because variable annuities are excluded from that provision.

Then replacement changes everything. Where a life policy or annuity replaces existing coverage, the free look becomes 30 days — and that rule lives in AID Rule 97 § 6(A)(4), a regulation, not in the Code. Long-term care carries its own 30 days (§ 23-97-311), as does Medicare supplement under AID Rule 27.

Life settlements — fifteen days, and one clock only

Arkansas regulates the secondary market through the Arkansas Life Settlements Act (§ 23-81-801 et seq.). The provision that gets tested is the owner’s right to unwind: the viator may rescind on or before the fifteenth day after the contract is executed (§ 23-81-811(i)(1)).

Fifteen days, running from execution. Note what Arkansas does not do here — it does not build a two-clock, whichever-comes-first rule of the kind California uses. One event, one number.

Annuities — the training is a gate, not a chore

Annuities fall inside the Life line, so no separate licence. But Arkansas adopted the NAIC best interest standard through AID Rule 82, effective 8 July 2021: a producer must act in the best interest of the consumer without placing their own or the insurer’s financial interest ahead of the consumer’s.

The practical edge is the training. A one-time 4-credit course is required, and since 1 January 2022 a producer may not sell annuities at all until it is complete. Producers who trained before 1 January 2021 do not get to coast — that older course needs either replacing with a post-2021 Best Interest course or topping up with an additional one-credit module. The credits count toward your 24 hours of continuing education.

Variable products need a second credential

Variable life and variable annuities require your FINRA securities registration alongside the Arkansas Life licence. Arkansas adds no further state examination for them. The structure is the tested point: life authority first, securities registration alongside, never variable products on the insurance licence alone.